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India significantly improves ‘economic ranking’ under Modi

Amit Agrahari by Amit Agrahari
2 November 2018
in Economy
india, ranking

PC: deccanchronicle.com

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The Modi government came to power in 2014 with an agenda of ‘Sabka Saath, Sabka Vikas’ and it was totally aware of the importance of economic growth in order to achieve development objectives. For decades, the country operated on Amartya Sen model of development where growth is given less importance but it didn’t work in uplifting people from poverty either. Therefore, the Modi government opted for the ‘growth model’ of development. For economic growth, it is necessary to make business operations easy and therefore, reforms were necessary. The government took many monumental steps including GST, IBC and RERA to reform the economy and this resulted in the improvement of rankings as far as international indices on parameters like business environment, technology, and industry performances is concerned.

Business Environment Index

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In the Global Competitiveness report which assesses the ability of countries to provide high levels of prosperity to their citizens, India’s ranking was 71 in 2014 while in 2018 the country jumped to the 58th rank. Global Competitiveness Index is published by World Economic Forum since 2004 and it combines macroeconomic and the micro/business aspects of competitiveness into a single index. Therefore, a jump of 13 ranks has been witnessed recently.

When Modi government came to power, India ranked 142 out of 189 economies in the World Bank’s ‘Ease of Doing Business’ report. Prime Minister shared a vision to bring India amongst top 50 nations in the ranking and worked consistently in the last four years to achieve the goal. The reform measures taken in the last four years resulted in a jump of 65 positions to 77th from 142nd in 2014.

Corruption Perception Index

In the Corruption Perception Index which ranks countries by their perceived levels of corruption, as determined by expert assessments and opinion surveys, India has gone up by 6 ranks in the last four years, the score improved from 36 to 40. In 2013, India was ranked 85th and now it is ranked at 79th. Despite being the perception that India is a corrupt nation, the ratings of India and China are similar. The Communist China, where government controls everything with an Iron fist features at the same level as India. The ‘Corruption Perception Global’ is published by the corruption watchdog Transparency International (TI). 

Technology Index rankings

In Global Innovation Index, which ranks the countries on their ability to innovate, India moved up by 24 ranks. Cornell University, INSEAD, and the World Intellectual Property Organization jointly developed the Innovation Index to make nations aware of the importance of innovation. It surveyed 143 countries around the world and used 81 measures to gauge innovation capability of an economy. India was ranked at 81st position in 2013 while the country got ranked at 57th spot in 2018.

In E-Government Development Index (EGDI) which measures the capacity of a nation to utilize e-governance as an instrument for development, India improved its ranking by 22 places. In 2016, the country was ranked 118th in 2014 and moved to 96th position in 2018. EGDI is a composite index measured on weighted average of Telecommunications Infrastructure Index (TII), Human Capital Index (HCI) and Online Service Index (OSI). The country improved on all three fronts riding on the various initiatives taken by the government including JAM (Jan Dhan- Aadhar-Mobile Number) and Digital India.

The country also improved by 19 places in World Bank Logistics Index, 2016. India moved to the 35th place from 54th out 160 countries in 2014. “Improvement in India’s ranking in Logistics Performance Index adequately establishes steady performance in our competitiveness in manufacturing and trade that also acts as one of the growth driver of Make in India Programme,” said the government in a statement.

In the list of countries producing steel, India improved to second rank in 2018 from 4th in 2014. China, the only country ahead of India in steel production has the production capacity of 831 million tonnes. As many cases of bankruptcy got solved through IBC including two big ones- Essar and Bhushan, the production of steel in India is expected to move northwards.

India thus, has made improvements in business environment index, technology index and corruptions perception index. The reform measures taken by Modi government have taken political economy of the country to ‘rule based capitalist economy’ from crony capitalism and favoritism based economy. The business environment in the country has improved significantly and corruption has gone down, programs like JAM and Digital India have ensured the participation of common people in new economy. The reforms taken in previous years is set to push nation’s growth in double digits.

Tags: Ease of Doing Business.EconomyInternational RankingPM Modi
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